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TRUCKERS STRIKE: SUPPLY CHAIN RESILIENCE?



We had a discussion with All India Motor Transport Congress representatives, govt want to say that the new rule has not been implemented yet, we all want to say that before implementing Bharatiya Nyaya Sanhita 106/2, we will have a discussion with All India Motor Transport Congress representatives and then only we will take a decision," Union Home Secretary Ajay Bhalla said.


On January 2, 2024, long queues were reported across petrol pumps in North and Western India after a strike by truckers entered the second day. People resorted to panic buying anticipating a disruption in fuel supply due to the strike.

The strike was in response to changes in the law which would have reportedly made penalties stringent in hit-and-run cases. Truck drivers allege that the penalties are unfair and create an unsafe working environment for them.

Though the strike was called off, if it had extended for a few days this could have caused a major disruption in the supply chain across the country. This incident underscores the importance of having supply chain resiliency and why it is crucial to work towards achieving it.

This blog will explore the impact of the truckers strike and what is the path toward achieving supply chain resiliency.


WHAT CAUSED THE STRIKE?

Changes in law can either be a beacon of progress or a lightning rod for dissent!

 

  • Truckers are one of the most important pillars in ensuring the supply of goods and services across the nation and as they went on strike, the discontinuity in supplies was observed across major states of India. The major demand of the truck drivers was that the new law on rash driving should be taken back.

  • The law states that if anyone causes the death of a person due to rash driving and escapes without reporting to the magistrate shall face 10 years imprisonment. This is an increase in punishment from the previous law which called for 2 years imprisonment for the same crime. Source: Mint 

  • This law change triggered the strike and thus further caused panic buying by the customers who anticipated a shortage of fuel.


POSSIBLE RISK SCENARIOS IF THE SITUATION HAD ESCALATED

"When fear drives the shopping cart, rationality often gets left behind. Panic buying is a desperate attempt to regain control in turbulent times."

 

Considering the above developments, it is vital to ensure that businesses focus on risk scenarios and governments must play an important role in ensuring continuity.

 

A possible risk scenario escalating due to trucker strike could be as follows:

  • Food, medicines, and fuel supply is disrupted across major cities

  • Prices of essential commodities shoot up

  • Mass protests are triggered due to a shortage of essential supplies

  • Protests if not resolved, could trigger civil unrest

  • Economic damages could be in millions of dollars due to the strike

The above scenarios, if they unfold could create a scary situation for all as these are plausible and are not something which are exaggerated.

To prevent a scenario like above from unfolding, we must strive towards achieving supply chain resilience to be ready to recover from any disaster.


SUPPLY CHAIN RESILIENCE FOR GOVERNMENTS

"A resilient supply chain is like a well-built ship that can weather any storm without losing its course."

 

Supply chain resilience refers to an organization's ability to anticipate, prepare for, respond to, and recover from disruptions in its supply chain. These disruptions can arise from various sources, including natural disasters, geopolitical events, economic uncertainties, technological failures, and other unforeseen circumstances. A resilient supply chain can adapt to these challenges, minimize disruptions, and quickly recover to maintain its normal operations.

Key components of a resilient supply chain resilience are:

Risk Management: 

  • Identifying and assessing potential risks in the supply chain is crucial. This involves understanding the vulnerabilities and potential impacts of various disruptions and implementing strategies to mitigate these risks.

  • For instance, in the above scenario, the risk due to supply chain disruption due to a change in law was this scenario considered? A law that the truck drivers did not like resulted in the disruption of the entire supply chain. Was this scenario thought off?

Collaboration and Communication: 

  • Strong communication and collaboration between different stakeholders in the supply chain are crucial. This includes suppliers, manufacturers, logistics providers, and customers. Timely and transparent communication facilitates a coordinated response to disruptions.

  • In the case of the strike, the government is a key stakeholder in the supply chain, and if both parties had good communication with each other, this situation might not have escalated to this level.

Supplier Relationship Management: 

  • Building strong relationships with suppliers is essential. This involves understanding their capabilities, assessing their resilience, and collaborating on risk management strategies, and protecting each other’s interests.

  • For governments, having a good relationship with the truckers is a lesson for the future to prevent a repeat of these incidents.

  • In today's interconnected and complex global business environment, governments that prioritize and invest in building resilient supply chains are better equipped to navigate uncertainties.


MAJOR GAPS IN ACHIEVING SUPPLY CHAIN RESILIENCE

"The gap in resilience is often a gap in perspective – shifting from seeing obstacles as insurmountable barriers to viewing them as stepping stones on the path to resilience."

 

Diversification: Relying on a single supplier or a single geographic region can increase vulnerability to disruptions. A resilient supply chain often involves diversifying sources of supply, manufacturing, and distribution to reduce dependence on any single entity or location.


Flexibility and Agility: Resilient supply chains are flexible and agile, capable of quickly adapting to changes in demand, disruptions, or market conditions. This may involve having alternative suppliers, flexible manufacturing processes, and responsive distribution networks.

 

Major Gaps: In the case of a transport strike, the limitations for diversification, flexibility, and agility are a real issue. No other alternate means of transport could replace truckers. Diversification will not help, as the trucks are not available to transport the goods irrespective of the different suppliers available.

 

So, this continues to be a major risk, and this, as we saw, materialized as well.

Hence, even though alternates are not available, maintaining strong relationships with the truckers can prevent such incidents. Maintaining a strong relationship involves taking care of the interests of the truckers (ensuring changes in law don’t adversely impact them), and also ensures a reduction in the likelihood of the risk materializing.

 

CONCLUSION

This trucker strike has brought to our notice the vulnerabilities in India’s supply chain and positively encourages us to examine real solutions to situations like strikes. If Truckers are not available, do you have any other alternatives to supply your essential goods?

Though we have supposedly alternate measures available to prevent a repeat of this incident, this existing gap ensures, that we are marching toward supply chain resiliency but have not yet achieved it.

 

Gorisco has a wide range of experts who are experienced in defining and designing various solutions to help organizations mitigate their risks and resolve their problems. 

At Gorisco, our motto is 'Embedding Resilience,’ and we are committed to making the organizations and their workforce resilient. Reach out to us if you have any queries, clarifications, or need any support on your initiatives. 

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